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Small business owners are some of the busiest people in the world, so if you’re in the market for a new business banking relationship, you may want to save time and open a business bank account online. Getting an online business checking account can help your business in several ways—by giving you a safe place to keep your business income, separating your business and personal finances, and making it easier to keep track of business tax deductions.
Don’t assume you have to go to a brick-and-mortar bank branch to open a business bank account. It’s more possible than ever to open a business checking account online.
Take a closer look at how to compare your options for online business bank accounts.
Benefits of a Business Checking Account
There are several reasons why you should open a business checking account to help your business grow:
- Separate your business and personal finances. This makes it easier to protect your personal assets in case of a lawsuit against your business.
- Keep track of tax deductions. Having a business checking account can make it easier for you to keep track of tax-deductible business expenses, such as payments to vendors and contractors, business equipment, supplies, inventory purchases, and anything else you need to purchase to operate your business.
- Build business credit. With a business bank account, you can start to build business credit under your business’ name (separate from your personal credit history). Getting a business checking account can be the first step toward getting a business credit card, business line of credit, or small business loan.
- Get advanced business banking services. As your business grows, you may want to access higher-level banking services like cash flow management, merchant services and point of sale (POS) systems, revenue projections, and data analytics to help you understand your business’ financial performance.
Choosing the Best Business Checking Account
When you’re trying to decide the best business checking account for you, think about your overall business needs, what you want from your business banking relationship, and which bank account features and services are most important to you.
Here are a few key things to keep in mind when choosing a business checking account:
- Digital banking features. The best business checking accounts typically offer a great digital banking experience—both from your workplace and on the go—with features like mobile check deposit, online bill pay and a user-friendly mobile app.
- Business banking services. Some banks offer a robust range of business banking services, such as small business loans, cash flow management, data analytics for your business revenue and sales forecasting, and more.
- Ease of integration. If your business uses digital business tools to process payments and manage your bookkeeping, such as PayPal, QuickBooks, Shopify, Stripe or Venmo, you may want to ensure that your choice of business checking account can integrate easily with the tools you prefer.
- Interest rates for deposit accounts. Some business checking accounts are interest-bearing, but the annual percentage yield (APY) may not be competitive with the best online savings accounts.
- Service fees. Pay attention to monthly service fees, ATM fees, wire transfer fees and any other costs involved with using your account or receiving payments from your customers.
- Branch banking and ATM access. If you need convenient access to ATMs to deposit cash payments to your business, or you need in-person banking services that can only happen at a brick-and-mortar branch, make sure your business checking account can provide these.
- Monthly transaction limits. Some business checking accounts allow only a certain number of transactions per month, and charge a fee for any transactions over that limit. Make sure you understand how much money is coming in and going out of your business in a typical month, so you can find an account that is the right fit for your transaction volume.
Business checking accounts tend to offer a wider range of features and services than a personal checking account. It pays to consider your business’ needs—both now and as it grows—when selecting a business bank account.
How to Open a Business Bank Account Online
You don’t always have to go to a bank branch to open a business bank account. Many banks have expanded their online offerings and made it easier to open a business bank account online.
The exact process depends on the individual bank, but, in general, here is how to open a business checking account online:
- Go to the bank’s website. Look for details about how to open a business checking account online.
- Choose the business bank account you want to open.
- Make sure you have enough money ready to fund the account with any required minimum opening deposit.
- Read the fine print for what business documentation you need to provide, depending on your business entity—limited liability company (LLC), partnership, sole proprietorship—and how to provide the documents online. For example, if you have an LLC, the bank may ask you to provide your business’ articles of organization. You will need to provide a tax ID number for your business, such as an Employer Identification Number (EIN) or, in some cases, your personal Social Security number. You also may need to provide personal identification for yourself as the business owner.
- Sign—electronically—any necessary authorizations, such as giving the bank permission to check your credit.
Not every type of business can open a business bank account online. If your business is not privately held or has multiple owners, members or partners, some banks will require you to come into a bank branch to open the account in person.
Frequently Asked Questions (FAQs)
How much money do you need to open an online business bank account?
It depends on the bank, but often: not much. Some of the best business checking accounts do not require a minimum deposit to open an account, or require only a modest opening deposit of $50 or $100. Even if your business is newly formed and not earning significant revenue yet, you can still open a business bank account.
Do I need an LLC for a business bank account?
No. Even if you have not formed an LLC or incorporated your business as a separate legal entity—for example, if you are doing business as a sole proprietor—you can open a business bank account. However, depending on the state, you may need to provide additional documentation to open your account, such as a business license, certificate of assumed name, registration of trade name or Doing Business As (DBA).
Why is it hard to open a business checking account online?
Banks are required by law to know the true identity of their customers. If you’re opening a business bank account, the bank needs to verify your identity and confirm not only that you are who you say you are, but also that your business exists as a legal entity that deserves its own separate identity within the financial system.
Sometimes this can be done online, so long as you can provide digital versions of any required business documentation. But some accounts and situations are more complicated and need more time and attention. Not every bank allows every type of business to open an account online. For example, if your business has multiple members/owners, the bank may require all of the business’ owners to come to the bank branch in person to verify their identities.
Do you need an EIN to open a business bank account?
No. If you do not have an Employer ID Number (EIN) for your business, in some situations you can open a business bank account by using your personal Social Security number or Individual Tax Identification Number (ITIN) for non-U.S. citizens.